US House Generates Bill to Prevent CBDC From Being Surveillance Tool

On September 20, the United States House Financial Services Committee discussed the CBDC Anti-Surveillance State Act, with conversations occasionally deviating into pop culture and politics, referencing Star Wars, anarchists, and ‘crypto bros’.

At the heart of the discourse were themes concerning the value of research, U.S. citizen privacy, and the government’s role in daily life, particularly in the context of a potential U.S. central bank digital currency (CBDC).

Tom Emmer tabled the bill after the committee had already passed several other bills. Describing his proposal as “simple,” Emmer said, “It’s designed to prevent the administrative state under President Biden from introducing a financial surveillance tool threatening the American ethos.”

Emmer voiced concerns about a CBDC granting the government undue power over citizen transactions, citing the digital yuan in China and Canada’s controversial account freezes during the 2022 truckers’ protest. According to Emmer, his bill has garnered support from 60 senators and numerous organizations.

However, Maxine Waters, a ranking member, dubbed it the CBDC Anti-Innovation Act. She argued it could jeopardize the U.S. dollar’s dominant global reserve currency status and accused Republicans of unfounded attacks on a yet non-existent CBDC. Waters later cautioned that this bill might allow China to dictate global CBDC standards.

Stephen Lynch identified inconsistencies in the bill’s wording, sparking debate on the scope of permissible CBDC research. Brad Sherman, drawing a distinction between cryptocurrencies and CBDCs, emphasized that participation in any CBDC pilot program would be voluntary.

Mike Flood voiced concerns over the unchecked power a CBDC might offer the government. He urged committee members to envision their least favorite politician wielding such authority.

The final consensus was that the bill would only allow CBDC issuance following congressional approval—a stance supported by the Federal Reserve. The discussion also acknowledged the broader issue of financial privacy, or lack thereof, in the U.S.

Waters and Lynch suggested amendments to clarify the bill’s impact on research, particularly focusing on China’s digital yuan and its implications for U.S. sanctions. Waters highlighted the mBridge pilot, which includes China, Hong Kong, Thailand, and the UAE.

After a four-hour session and a recess, the committee reconvened, voted against the proposed amendments, and passed the bill with a 27 to 20 vote, forwarding it to the full House.